Why it matters: In every area of life, never assume things can’t get any worse; they always can. The graphics card market, for example, is in total shambles right now, with availability a nightmare and prices through the roof. But a predicted increase in the price of GDDR6 memory could push those prices even higher.
The depressing news comes from TrendForce, which notes that graphics DRAM prices are expected to rise by 8% to 13% throughout the year. That will almost certainly push up the retail prices of graphics cards already selling way above their MSRP.
Why is this happening? TrendForce writes that there are four main factors behind the price hikes. The first and most obvious one is that the unprecedented demand for graphics cards, a result of the global chip shortage, cryptominers, and scalpers, seems to be getting worse rather than better.
Another factor is Nvidia. Team green is, naturally, one of the largest customers for GDDR6 and GDDR6X firms, seeing as the DRAM is bundled with some of its GPUs, which means suppliers give Nvidia priority over smaller clients when it comes to allocating production capacity. Additionally, contract manufacturers that create the latest consoles for Sony and Microsoft, which use 16Gb GDDR6 memory, are also being prioritized, as is production of server DRAM products.
“As various products each compete over limited DRAM production capacities, graphics DRAM contract prices are expected to undergo an increase going forward. In particular, medium- and small-size OEMs/ODMs may likely face double-digit percentages increases,” states the report.
TrendForce adds that fulfillment rates for some medium- and small-size customers have been around 30%, explaining why spot prices of graphics DRAM products were occasionally up to 200% higher than contract prices. It’s noted that the decline in the value of some cryptocurrencies has caused spot prices of GDDR6 products to fall, but they remain nearly 100% higher than the average contract prices.
One thing that isn’t being heavily impacted is GDDR5, which has seen almost no difference between spot and contract prices due to it primarily being used in older graphics cards such as the GTX 1650/1660.
AMD has said it hopes to increase its GPU supply in Q3, and Nvidia will likely be trying to do the same. With crypto prices trending downward, partly thanks to Elon Musk, we can hold onto the hope that the situation could slightly improve later this year. But with one manufacturing giant warning normality might not return until 2023, now’s certainly not a good time to build a new PC.
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